The retail supply chain is laden with $450 billion worth of inventory, according to an April report from the U.S. Census Bureau. In addition, inventory carrying costs across all sectors increased 10.3 percent last year, according to a recent State of Logistics Report by the Council of Supply Chain Management Professionals.At Ryder, we estimate that at least 10 percent — about $45 billion — of those inventories are associated with the execution of the logistics network, which we call “logistics inventory.” Already faced with the challenge of SKU proliferation, rapidly changing consumer trends and longer supply chains due to global sourcing, it’s more important than ever to remove excess logistics inventory from the supply chain.
Let’s consider a few examples of where logistics inventory is tied up in the supply chain.
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